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My Two Mental Habits

Here's
a quick, not very clear worry I am entertaining this morning. We are
all prone to confirmation bias, especially when it comes to politics.

Of course, I, being a lefty, think that while I am obviously prone too, I
am not nearly as prone as most Tories. Still, I need to be vigilant
(after all, those Tories think the same about me). So here are two mental habits
of mine. How bad are they?

FIRST MENTAL HABIT. Whenever I hear
of some new Tory economic policy, my first involuntary question is: 'Cui
bono?' - who benefits? And in each case my very strong expectation is
that, while the policy might be packaged as egalitarian - as helping the
less well-off (e.g. to get on the housing ladder) - it will almost always
most significantly benefit billionaires and/or big business.

And Lo! In almost every case, I am able to show that it does!

Examples: (i) tuition fees were packaged as being about 'fairness' (why
should a poor postman pay for some Eton boy's university education?)
but (pace the claims of some centrist dads) appear to benefit the wealthiest
and the financial service industry most, (ii) taking peoples homes
(or part of the value thereof on their death) to pay for their care on
old age is again packaged as being about 'fairness' but it seems to me
that again the very wealthiest will benefit most from this policy (and
probably the financial services industry too), (iii) the announced new
help for first time buyers will be of most help to big landlords, whose
property portfolios will hugely increase in value as a result. Actual
first time buyers will benefit hardly if at all (as prices will
immediately shoot up).

Is this fair, or am I cherry-picking, massaging, etc. a lot to get the result I want?

IF (I say IF) I am right, surely this is a very important journalistic
angle to take re any Tory economic policy announcement. It seems to me to would be a dereliction of ones journalistic duty not to press the 'Cui bono?' question very hard when it comes to any new Tory policy announcement.

But, and here's
my SECOND MENTAL HABIT - my expectation is that the media will rarely
consistently press this 'cui bono?' line of inquiry. And Lo! It seems to
me they don't!

For example, re (i), (ii), and (iii) above, can
you point me to examples of our supposedly thrusting, impartial BBC
interviewers pushing my 'cui bono?' line of inquiry - and raising the
issue of whether it isn't, actually, billionaires and Big Business that
will benefit most?

They did pick up on it a bit re (iii) after the OBR said the benefits would not actually go to first time buyers (http://www.bbc.co.uk/news/business-42095146).
But this was simply the BBC reporting on what some other agency had
already pointed out. Off the top of my head I don't remember any journalists, let alone the BBC, EVER, on their own initiative, pressing the
'cui bono?' question re (i) or (ii) but again maybe I'm cherry picking
and there are actually plenty of examples I have missed or forgotten
about.

And so, I conclude, the BBC is indeed VERY politically
biased. It's almost as if the BBC consider it would be in bad taste to
press the 'cui bono?' question - and to flag the obvious answer - when
it comes to Tory economic policy.

POST SCRIPT. Someone asked me on facebook why I suppose the Tory social care proposals (they take from the value of your home to pay for your social care) benefits the most wealthy. Here's my explanation.

"My
thought was that if I was a greedy billionaire I would be very keen on
the policy. Currently social care is funded largely through progressive
taxation. So, as a billionaire, I end up paying a hell of a lot for the
social care of others. Fuck 'em. Let
them sell their houses to pay for their own care. Then my taxes go down.
Their costs rise enormously. The poorest, lacking houses, don't
directly lose out but they get no benefit either. True, I have to pay
for my own social care but that's capped at what is, for me, a tiny
amount compared to the tax I no longer have to pay. Probably, I would
lobby the Tory Party to do this. Much the same
logic explains why I am also very, very keen on tuition fees."

(Incidentally, being a billionaire,
much of my wealth goes into tax havens so that's where a lot of this
extra cash I now have will go. Not into the economy, but offshore. So
others will suffer twice over. But, like I say, fuck 'em.)

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Comments

Adam said…

This is interesting, but why not administer your first line of enquiry (at least) to all parties’ economic policies? It seems to me that if you dig far enough, you will find surrogate big business beneficiaries to all economic policies. For instance, the banking industry will benefit from free further-education for all, as then they will be able to pick the best from a much wider natural pool of graduates, rather than a much smaller pool of the more financially privileged. Likewise, paying NHS staff more will place greater financial strain on the free health system, that will increase the chances of it buckling, and paving the way for an American style private health system.

Cui bono sniping at pro-market policymaking tacitly presupposes bad faith on the part of the policymakers, which presupposition in turn appears to be motivated by a rejection out of hand of the policymakers' theoretical stance (although logically I suppose you could possibly think of market economics as correct while viewing Tories as evil). So you seem to be begging the question in favour of your 'leftie' views.

Against that it might be said that adducing consistent-fact evidence in favour of a theory does not presuppose its correctness but rather attempts to support it. But how strong is the evidence in this case? If market economics is correct, its application benefits everyone, so the act of applying it will necessarily benefit its policymakers while promoting the general economic good. To require that policy should not benefit policymakers would be absurdly self-defeating. So the cui bono evidence is very weak.

Cui bono is not the sort of argument that appeals to basic data. If you want to consider some basic data, go to http://www.worldbank.org/en/understanding-poverty, from where you will be able to calculate that the actual globalised, free-trade, neoliberal market economy ('capitalism' to its enemies) has reduced the number of people in severe poverty at a rate of over a million people per week. In contrast, the economic regimes of Marx and his heirs have yet to record their first actual success. These are the sort of facts to which a sensible economic theory should be responsible. Is yours?

I am not presupposing bad faith Chris. I am fully aware that the policies might supposedly be justified by trickledown, free market, and/or or supply side economic theory, say. Indeed, they are so justified. These theories do indeed say everyone benefits in the end, as you say. We can argue about whether such theories are correct (I note that the economic consensus, if not the political consensus, seems to be they are *not* correct).

However, it seems to me entirely correct that a Party funded very largely by the very wealthiest, whose policies which do seem almost always disporoprtionately to economically favour the very wealthiest, should be questioned very vigorously on this connection - for this is more than a whiff of corruption here isn't there? Certainly, that the very wealthiest ARE the main direct beneficiaries (and not the poor first time buyers, postmen, etc.) of the policy should at least be *pointed out* by any impartial, truth-seeking journalist, right? And yet this almost never happens. That is bias.

PS Chris - I see you go to Marxist regimes to illustrate the alternative to the kind of free market capitalism of the sort the Tories favour, but of course that's a strawman. What Corbyn favours is simply the *highly* economically successful higher-tax, free university, nationalised infrastructure, generous social provision Scandawegian model, as this Norwegian chap points out. So focus on the data re those countries, not Cuba. https://www.opendemocracy.net/can-europe-make-it/jonas-fossli-gjers/jeremy-corbyn-mainstream-scandinavian-social-democrat

The claim that market-oriented policies favour the wealthiest disproportionately stands in need of some commentary. Inequality increased during the 1980s, but complaints about ever-rising inequality are incorrect. The Gini index of UK disposable income shows slight decrease in inequality since the 1990s. That presumably is why the advocates of this complaint tend to appeal to their own emotive 'statistics' rather than the measure devised by statisticians to measure the phenomenon objectively. The fact that the '1%' can have got richer while inequality has not increased overall (since 1990) is (weak) evidence in favour of liberal economic measures boosting overall economic well-being. It is true that the 1% have got proportionately better off than others, but not at the expense of others given the outline facts just mentioned. The rich rate to get richer 'cui bono'; but if this is not to the detriment of others, the fear of insider malfeasance subsides somewhat (though it is right to raise it, as you say).

(Piketty's argument about rising inequality is ludicrous, since in Capital he expressly excludes the effect of transfer payments. Our sophisticated western polities have introduced transfer payments precisely to ameliorate the economic conditions of lower income recipients, so it is absurd to focus moral attention on the situation that would obtain without them.)

Your reply clarifies your views, but in doing so undermines the 'leftie' perspective, which always tends towards a bigger state (as does Scandi-social-democracy). This increases rent-seeking, big-business lobbying, crony capitalism and regulatory arbitrage - Nordic noir, as one might call it. A 'lean-burn' state is necessarily less prone to cui bono abuse.

As a rider to that, the current government is much less economically liberal than the 1980s regime, and therefore more prone to cui bono worries. But I don't think you want to bring back the Magatollah.

As for the BBC, its house ideology is usually thought to be more sympathetic to the 'left' than its adversaries. But I can see how it sometimes offends the other side too, which implausibly makes me feel a twinge of sympathy for the poor fellows.

Marx scholar here.I had no idea Marx had an economic regime. Amazing! Could you please pinpoint me to the regime I somehow missed in a decade of studying his work? I could have sworn Capital Vol I-III was an analysis of Capitalism, and how it operates, but I guess I missed something!

(Before this gets knee-jerk ugly, if you say Marx is responsible for the USSR or Mao's China, that's as asinine as saying Jesus Christ is responsible for the Crusades, or John Locke for American imperialism and the confederacy.)

Hi Chris (Humphries). Thanks for your response. You mention stats re Gini coefficients with which I am at least a bit familiar but I cannot yet see their relevance. Corbyn, though portrayed by opponents as a swivel eyed loony leftists who will turn the UK into Venezuela, actually favours policies of the sort that dominate in the Scandanavian market economies. Have you stats to show that these economies, following such policies, do less well in terms of inequality. Every stat I have seen supports the opposite view, but perhaps you have other data.

My post was on how Tory policies appear almost always to disproportionately, and fairly directly, economically favour the very wealthiest and Big Business, despite their being dressed up as being about 'fairness', benefitting the less well-off, etc. I pointed to the fact that (it seems to me) this is rarely even raised by e.g. BBC journalists. What's the relevance of your first para to my comments? I guess the reason you mention data re Gini coeffecients is that you think free market economies reduce inequality and float all our economic boats. However, I don't see the relevance of those stats as the Scandanavian economies of the sort Corbyn favours are just such economies! Your stats would only be relevant, I think, if Corbyn was *opposed* to such economies. But he supports them.

CHRIS YOU SAY "Your reply clarifies your views, but in doing so undermines the 'leftie' perspective, which always tends towards a bigger state (as does Scandi-social-democracy). This increases rent-seeking, big-business lobbying, crony capitalism and regulatory arbitrage - Nordic noir, as one might call it. A 'lean-burn' state is necessarily less prone to cui bono abuse."

These are popular rightwing views that pass for accepted wisdom in certain circles, but as they stand they are all just assertions, aren't they? Where is your EVIDENCE that Scandi-social democracy is more prone to crony capitalism? Do you have statistics showing that the Scandanavian states suffer far more from pernicious political influence, e.g. tax breaks for the rich, contracts being pushed towards political donors, etc. than do 'lean burn' state like the US or UK?

"As for the BBC, its house ideology is usually thought to be more sympathetic to the 'left' than its adversaries." This is only believed in rightwing circles. What actual data I have seen (e.g. LSE, Birkbeck studies) seems pretty strongly to support the view that the BBC is economically pretty biased to TOWARDS the right. Further, I am here pointing to a specific example of what I think bias - the failure of the BBC to press the cui bono question re Tory economic policies and point out that the biggest beneficiaries of their policies are almost always the very wealthiest. Saying "Some say it is biased right, some say it isn't' doesn't really deal with my point.

I want to amicably push back a little against both of you. Professor Law,It does seem to me that another answer to your cui bono question is capital, not capitalists. That is, the intended beneficiary of these policies is the rate of profit of capital in general, whether or not it happens to benefit this or that income bracket. This explanation avoids making your final facebook claim, that ultimately these policies are intended to help greedy people. No doubt there's lots of greedy people, on the right, left, center, and off the spectrum, but perhaps the reason we keep seeing austerity across the globe, decreased taxes, right-wing reactions like Brexit and Trump, etc etc., is because capital has run out of regions to imperialize, and fresh markets to open up, and now has to valorize itself by assaulting what were once public markets (e.g., education). No doubt capitalism breeds more greed than is normal or moral in a human being, but that's an effect not a cause.

To Chris H (and Stephen a little bit):The human species is very old. Approximately 150,000 years old. We've had many social arrangements. Two of which are capitalism, and state managed dungeon economies. Surely those aren't the ONLY TWO. Surely we do better than both. To press Law as if the only options are the USSR or capitalism is a glaringly false disjunct. But also, to say it's only capitalism, ussr, or denmark, is a false...Trijunk?

I'm reminded of Chomsky's claim regarding propaganda in liberal democracies, heavily narrow the spectrum of the debate (USSR or unfettered capitalism) then allow for a very lively debate.

To both respondents: The "of" in "the economic regimes of Marx and his heirs" was not intended as meaning "implemented by" but "motivated by". The phrase "and his heirs" was intended to be construed broadly. I was talking about broadly socialistic economies. These are all descendants of Marx to some extent, at least in my view; but if not, the issue is merely terminological - about a piece of shorthand. (Although I asserted failure, I admit that the Scandi social democracy cases create a real area of debate through some demonstrable success. But my primary target is the cui bono argument.)

Stephen: The argument in my previous first paragraph went by rather quickly, and clearly needs expanding. More formally:

4. Liberal economic policies since 1990 have been accompanied by a reduction in Gini inequality (1 and 3)

5. Liberal economic policies since 1990 have been accompanied by a disproportionate increase in the wealth of the top 1% (1 and 2)

6. Liberal economic policies have favoured the top 1% disproportionately since 1990 but not at the expense of overall Gini-equality (4 and 5)

7. Suspicion of cui bono government malfeasance arises if a group associated with the government benefits from implemented policy (definitional)

8. Suspicion of cui bono government malfeasance is reduced if the suspect policy implementation is widely beneficial (by assertion)

9. Suspicion of cui bono government malfeasance is in the 'reduced' category in the case of liberal economic policy (3, 6, 7, 8)

The central point at issue is whether there is "more than a whiff of corruption here". Well according to 9 there is nothing more than a qualified suspicion. This comes back to my original proposal, that the argument is being carried along by a strong animus against liberal economics.

PS The term 'rightwing' is a hazardous piece of shorthand. There's nothing in common between economic liberals and social authoritarians, for example. There is no property of 'being rightwing' that can be used to carry inferences between disparate political ideas. 'Right' and 'left' were originally coined as the sides of the fan in which the ancien regime and the Jacobins sat in the French revolutionary assembly. There's nothing logical or metaphysical going on here, but what does rendering the term as a single word suggest, other than that there is? When I used the terms 'leftie' and 'left' it was with scare quotes to denote awareness of the limited proper use of the terms.

PS2 Just as a matter of interest, the cui bono argument is currently being used in Democratic quarters against Trump's tax reforms. Or at least, the claim that the reforms favour the wealthiest is being stated, with at least a suggestion, and sometimes an assertion, that this is Trump's clan.

CH,I have to reject even this response as Marx's general claim was that socialism was workers' democratic ownership of the means of production. So far as I can tell, the systems you refer to were 1) non-democratic, 2) state managed. Thus not even close to what Marx was talking about (just as most churches would be anethema to Christ, and most imperialist projects anethema to Kant, Locke, Smith, etc).

Now, has democratic ownership of the means of production ever been implemented? Yes, quite often. And it never suffers the authoritarian atrocities you find in the USSR. E.g., watch Naomi Klein's 'The Take' - a documentary now free on youtube. Or look into mondragon (not strictly Marxian but still interesting). Or look at the anarcho-syndaclist movements in Spain that Franco and the West crushed. Pre USSR soviets are good examples too. Steinbeck also depicts actual socialist systems in In Dubious Battle and Grapes of Wrath. The problem is, once workers form genuine socialism, they lack the power of a state (e.g., a centralized monopoly of force). To my mind this is good, having institutions that cannot wage war is morally superior to those that can. Nevertheless it has two 'negative' consequences. If they are attacked 1) they cannot defend themselves and lose (most of the cases listed above), or 2) they centralized power in an authoritarian and defend themselves, but lose what was good about socialism (e.g., Stalin, Mao).

I think one of my responses, preceding this rejection, was lost/not made.

I'll try to make it again.

First, Professor Law, please allow me to amicably push back,Perhaps it is not the greed of certain powerful capitalists that is the cause of the misinformation and the source of the 'who benefits' question. No doubt capitalism engenders more greed than is normal (or moral) in humans, but perhaps the beneficiary of these tax cuts, assaults on welfare programs, and overall austerity measures is not capitalists but capital. There is no (internal) limit to capital, it must keep growing and expanding, and with no more regions to imperialize, and a lack of markets to open up sweat shop style cheap labor in, public markets (e.g., healthcare and education) now need to be converted into private markets, and taxes which eat into overall accumulated capital now need to be lifted, if capital is to keep growing. Greed, Trump, Brexit, etc., are effects, not causes here.

To CH (but also Professor Law just a bit),The human species is 150,000 years old. We have had many social arrangements. Two of them are capitalism, and dungeon style state managed economies. To say we must choose between capitalism or a dungeon is a false disjunct. To say we must choose between capitalism, a dungeon, or heavily regulated Denmark capitalism, is a false ... uh...trijunk...?

I'm reminded of Chomsky's point about how propaganda promulgates in western-liberal democracies where the press is mostly privately owned and 'free'. First NARROW the spectrum of the debate. THEN, allow for a lively debate within a myopic spectrum.

We have other choices. Surely we can do better.

--------------

[That said I do love that Corbyn, he's one of the few people left in politics with a 'soul' and empathy]Best,CB

Chris - you are not comparing like with like. My point re Tory policy is that the three examples I gave all involve the very wealthiest benefiting *at the cost of those economically down the ladder*. Which is very much the pattern re Tory policy, I suggest.

You point to good Gini results from 'liberal' economic policies, but those include the Scandiwegian policies, which are Corbynomic policies! Moreover those states running Corbynomics are not only very successful economies, they have *even lower* Gini coeffeicients. Such policies do indeed benefit the rich, as you say, but not *just* the rich - they benefit us all equally (well actually the data suggests they benefit the less rich more). So there's no justification in that data for claiming that such 'liberal' economic policies are being pursued just for the benefit of rich, even if they do in fact benefit the rich.

But now look at Tory policies. Look at my three examples. They involve more or less direct redistribution of wealth upwards towards the very rich at the expense of those down the ladder who, in the case of tuition fees, must then carry debts of 50k plus with 6% interest, who must give up a large chunk of the value of their homes to pay for their social care, or who must see house prices raise even more, thus cancelling out the so-called 'help for first time buyers' on offer while increasing the wealth of rich landlords massively!

And this is being done by a Party that is hugely funded and influenced by the very, very wealthy. That is grounds for considerable suspicion, I think. For the BBC not to even raise those last points seems to me to be symptomatic of bias.

I suppose you might insist all this wealth being directed upwards will 'trickle down' again and then some, but no one is really buying that anymore are they?

I think one of my responses, preceding this rejection, was lost/not made.

I'll try to make it again.

First, Professor Law, please allow me to amicably push back,Perhaps it is not the greed of certain powerful capitalists that is the cause of the misinformation and the source of the 'who benefits' question. No doubt capitalism engenders more greed than is normal (or moral) in humans, but perhaps the beneficiary of these tax cuts, assaults on welfare programs, and overall austerity measures is not capitalists but capital. There is no (internal) limit to capital, it must keep growing and expanding, and with no more regions to imperialize, and a lack of markets to open up sweat shop style cheap labor in, public markets (e.g., healthcare and education) now need to be converted into private markets, and taxes which eat into overall accumulated capital now need to be lifted, if capital is to keep growing. Greed, Trump, Brexit, etc., are effects, not causes here.

To CH (but also Professor Law just a bit),The human species is 150,000 years old. We have had many social arrangements. Two of them are capitalism, and dungeon style state managed economies. To say we must choose between capitalism or a dungeon is a false disjunct. To say we must choose between capitalism, a dungeon, or heavily regulated Denmark capitalism, is a false ... uh...trijunk...?

I'm reminded of Chomsky's point about how propaganda promulgates in western-liberal democracies where the press is mostly privately owned and 'free'. First NARROW the spectrum of the debate. THEN, allow for a lively debate within a myopic spectrum.

We have other choices. Surely we can do better.

--------------

[That said I do love that Corbyn, he's one of the few people left in politics with a 'soul' and empathy]Best,CB

I can't say anything about 'trickle down' since I have always found the idea to be incoherent. What is supposed to be trickling down what? I've seen the idea illustrated as droplets of 'wealth' trickling down an income distribution curve to broaden it out. The incoherence here is that the prior curve is a counterfactual. It never exists (because its preconditions don't exist, the supposed trickling down being part of an internal process leading directly to the actual outcome). A nonexistent cannot figure in a causal story. (Although that does happen in quantum mechanics!)

The actual distribution is an outcome of a complex process, with complex internal dependencies. There is functional dependence of the outcome on input variables (such as tax rate structures). You could talk about 'before' and 'after' income distribution curves in relation to some change in inputs; but that is not the same thing as something in the system interacting with the old state of affairs to produce a new one - as a 'trickle down' mechanism suggests.

What is true, for example, is that the input change of increasing already-high marginal tax rates is a revenue-negative move. That is why the top UK rate was set at 45%: the Treasury reportedly advised Mr Osborne that this rate (46% actually) was the turning point, above which any increase will reduce revenue. The reasons for this effect are well understood, and the effect is obvious in any case, since a 100% tax rate will produce 100% of nothing. There must be a turning point somewhere.

That is why Mr Corbyn is whistling in the wind if he genuinely thinks he can fund his nationalisation programme by 'taxing the rich'. It's a fantasy.

Of course, the above does not justify bad policies that favour wealthy vested interests. It's just a supply-side point. I'm not minded to defend the present regime's horrible cludges. But these are departures from proper market mechanisms. They do not exemplify anything corrupt in the purer supply-side policies of the 1980s, which had a clearly and forthrightly expressed theoretical base that aroused little suspicion of insincerity. It was criticised heavily, but on its face value.

PS Another term that should not be used is 'free market' (or, relatedly, 'wild west') as a description of liberal or supply-side economics. Markets are artificial constructions based on law and regulation. No-one that should be taken seriously wants those constraints abolished: serious companies don't organise in countries in which they can't enforce contracts at law.

PS2 Line 1 of my formal argument should have read "...(UK disposable income)...". The argument does not transgress scope boundaries (as far as I can see).

To CB: I will look up your examples of fledgling socialism-without-the-state cases, which look interesting. In the meantime, tangentially to your 'alternatives' point, there is an argument for a binary opposition between Marxist economic regimes (i.e the ones you would like to see) and 'capitalist' ones (rude word for the market economy) in their various ('disjunct' and 'trijunk' - ha ha) versions. That is because the distinction can be drawn very fundamentally, if my understanding is correct...

When I read Marx's Capital a great many years ago I was struck by the way in which the whole thesis seems to stand on the value added theory: because the worker adds the value in a factory process, the value added belongs to her, but is expropriated by the factory owner. This makes labour contracts fundamentally unjust. The liberal view is that property and contract rights (the basis of the market economy) are fundamental rights in the person. The exercise of such rights may lead to sub-optimal outcomes, and there may be a case for making political adjustments to offset the problems; but the basic transactions are not fundamentally unjust. If this disagreement about the fundamental justice of economic transactions is correctly drawn, then there is a very deeply rooted bi-polarity between Marxist and market views.

If you do yourself accept that sketch, then there is a question for you to answer. The value added theory does not stand up very well. (Is a gold miner's work worth more than a coal miner's, in proportion to the relative value of the amount of each material that can be excavated in an hour? How should the added value be recognised of the factory owner's investment decision to build a semiconductor factory rather than a typewriter one?) So: if the value-added-belongs-to-the-worker theory is a footnote in economic history, how can the Marxian programme (to which it is fundamental) be reconstructed?

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